The Federal Trade Commission filed a complaint today with the U.S. District Court of New Jersey accusing seven companies and their principals of violating federal law by falsely promising to erase all negative information from a consumer’s credit report.
According to the agency’s press release, the FTC says the companies practiced deceptive marketing by misrepresenting their services in violation of the Credit Repair Organizations Act. They are also charging the businesses with failing to offer consumers written, required-by-law contracts and for departing from the required wording in the contracts.
The commission claims the businesses charge as much as $2,000, and at times even include a $300 upfront fee, for a service which consumers falsely believe will improve their credit score by removing negative but accurate information such as late payments, charge-offs and delinquencies.
The FTC says the company’s marketing includes an ad on a third-party website that says, “100% Guarantee to raise your credit score!” Transcripts of telephone calls with consumers obtained by the FTC include employees of the business stating, “It’s all legal,” and “I can’t tell you much because I’ll be giving you my trade secrets, but I can definitely guarantee that we’ll take care of anything that’s derogatory on her credit report.”
The FTC seeks action against:
- Bankruptcy Masters Corp.
- National Bankruptcy Services Corp.
- Federal Debt Solutions Ltd.
- United Money Tree Inc.
- United Credit Adjusters Inc., known as United Credit Adjustors and UCA.
- United Credit Adjustors Inc., known as United Credit Adjusters and UCA.
- United Counseling Association Inc., known as UCA.
- Ahron E. Henoch, Ezra Rishty and Gerald Serino (also known as Jerry Serino).
The commission wishes to force the companies to cease their violations and compensate their customers.
In the release, the FTC reminds consumers that only time, a calculated effort and a personal debt repayment plan can improve their credit reports. If there is something in error on your credit report, federal law allows you to have it corrected for free. Federal law also dictates that the three national consumer reporting companies — Equifax, Experian, and TransUnion — must provide you with a copy of your credit report once every 12 months for free. But you have to ask for it.
To order a free report, go to annualcreditreport.com, call (877) 322-8228 or mail a completed Annual Credit Report Request Form to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348.